Publisher's Summary

As the stock market crash of 1929 plunged the world into turmoil, two men emerged with competing claims on how to restore the balance to economies gone awry. John Maynard Keynes, the mercurial Cambridge economist, believed that government had a duty to spend when others would not. He met his opposite in a little-known Austrian economics professor, Friedrich Hayek, who considered attempts to intervene both pointless and potentially dangerous. The battle lines thus drawn, Keynesian economics would dominate for decades and coincide with an era of unprecedented prosperity, but conservative economists and political leaders would eventually embrace and execute Hayek's contrary vision.
From their first face-to-face encounter to the heated arguments between their ardent disciples, Nicholas Wapshott here unearths the contemporary relevance of Keynes and Hayek, as present-day arguments over the virtues of the free market and government intervention rage with the same ferocity as they did in the 1930s.

Customer Reviews

An unbiased evaluation of both the major economist

Unlike many economist authors, this author is unbiased and lays it out factually.His ability to separate opinion from facts makes the book easy to digest. Hats off to the author.His first brilliant assessment that Keynes talks about Macro while Hayek talks about Micro economics sets the stage and expectations that the two shall never compete on an equal platform. Next, he walks us through each personal life, although i feel he explored and criticized Hayek's personal life more than Keynes.The success of Keynes and how governments devoured his advice of intervention is elucidated clearly. I can now see how the world fell into his enthrall (and his ability of public speak).Hayek's greatest weakness and the classical school's weakness was its extreme insistence on laissez faire to the point of being cruel. Add to that, Hayek's inability as a public speaker. If probably Hayek were like President Reagan, we would have seen a Hayekian world now. Sadly Keynes was a better preacher.The first Great conflict between Hayek and Keynes as criticism of Keynes's first book makes for interesting reading, anecdotally.Keynesian economics assumes that the economy is a fragile thing, one that involves constant tweaking by the State. This automatically assumes that entrepreneurship is guided by the hand of the State. Keynes does not explain business cycles and why they happen. Instead he talks about how to spend yourself out of recession. However, the Great Depression was becoming a past thing by 1936 as the author noted, before keynes remedies were fully applied.Hayek assumes that the economy is a living, breathing sentient being which can find its own path through the judgements and decisions of millions of entrepreneurs who make them. Much like the millions of cells in a human body.Hayek proves that State intervention skews up the investment judgements made by individual investors and thus forces them to make bad judgements.That may be true, but when an economy is in a slump, Hayek prescribes doom and despair to Keynes's optimistic approach.In short, a book worth reading.